Understanding how much house you can afford is a crucial first step in the home-buying process. A mortgage affordability calculator helps you estimate the maximum loan amount you might qualify for, based on your income, debts, and other financial factors. This tool is designed to give you a realistic idea of your purchasing power, allowing you to focus your house search on properties within your budget.
When calculating mortgage affordability, several key factors are considered by lenders. These include your gross monthly income (your income before taxes), your recurring monthly debt payments (like car loans, student loans, and credit card payments), and the estimated monthly housing expenses. These expenses typically include principal and interest payments on the mortgage, property taxes, homeowner's insurance, and potentially private mortgage insurance (PMI) or homeowner's association (HOA) fees. Lenders often use debt-to-income (DTI) ratios to assess risk. A common guideline is that your total monthly debt payments (including the proposed mortgage) should not exceed 43% of your gross monthly income.
Mortgage Affordability Calculator
function calculateAffordability() {
var grossMonthlyIncome = parseFloat(document.getElementById("grossMonthlyIncome").value);
var totalMonthlyDebt = parseFloat(document.getElementById("totalMonthlyDebt").value);
var interestRate = parseFloat(document.getElementById("interestRate").value);
var loanTermYears = parseInt(document.getElementById("loanTermYears").value);
var estimatedMonthlyTaxesInsurance = parseFloat(document.getElementById("estimatedMonthlyTaxesInsurance").value);
var resultDiv = document.getElementById("result");
resultDiv.innerHTML = ""; // Clear previous results
if (isNaN(grossMonthlyIncome) || isNaN(totalMonthlyDebt) || isNaN(interestRate) || isNaN(loanTermYears) || isNaN(estimatedMonthlyTaxesInsurance)) {
resultDiv.innerHTML = "Please enter valid numbers for all fields.";
return;
}
// Maximum DTI ratio typically around 43%
var maxDTI = 0.43;
var maxTotalMonthlyPayment = grossMonthlyIncome * maxDTI;
var maxMortgagePayment = maxTotalMonthlyPayment – totalMonthlyDebt – estimatedMonthlyTaxesInsurance;
if (maxMortgagePayment 0) {
maxLoanAmount = maxMortgagePayment * (1 – Math.pow(1 + monthlyInterestRate, -numberOfPayments)) / monthlyInterestRate;
} else { // Handle 0% interest rate case
maxLoanAmount = maxMortgagePayment * numberOfPayments;
}
if (maxLoanAmount > 0) {
resultDiv.innerHTML = "Estimated maximum affordable loan amount: $" + maxLoanAmount.toFixed(2);
} else {
resultDiv.innerHTML = "Could not calculate a positive loan amount with the provided inputs. Please check your numbers.";
}
}